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To: Employees Represented by CUPW – Urban Postal Operations
From: Lynn Palmer, Vice-President, Human Resources
Date: January 28, 2004
Subject: Changes to Article 28 – Severance PayThe purpose of this memorandum is to explain changes to your severance pay benefit and provide you with information needed to select your payment option preference. During the most recent round of collective bargaining, Canada Post and the Canadian Union of Postal Workers (CUPW) – Urban Postal Operations negotiated changes to Article 28 – Severance Pay. Amendments to this benefit will help ensure that all of your benefit programs continue to be affordable, and that those elements of the plan valued by employees, like health, dental and vision care, continue to be viable in the long-run. In the past, severance pay for retirees was calculated according to years of accumulated continuous service multiplied by one week’s pay to a maximum of 28 weeks. For employees who resigned, it was calculated according to years of accumulated continuous service multiplied by half of one week’s pay to a maximum of 26 weeks. Severance pay was based on completed years of continuous service only, and regular employees needed a minimum of 10 years of continuous service to be eligible for the benefit. Part-time service and periods of combined part- and full-time continuous service were pro-rated. How Has Severance Pay Changed? Effective December 31, 2003 employees represented by CUPW – Urban Postal Operations will no longer accumulate continuous service for the purpose of calculating severance pay. You will instead be offered the choice of receiving your severance pay entitlement either: a) on June 30 as an accelerated one time lump-sum payment equal to your years of continuous service multiplied by one week of salary as of December 31, 2003, OR b) when you retire, as a payment equal to your years of continuous service as of December 31, 2003 multiplied by one week of your salary at retirement. The payment will be capped at a maximum of 28 weeks of salary and will be pro-rated for periods of part-time continuous service. Continuous service for the purpose of calculating severance pay will include completed and partial years of service. Who is Eligible to Receive This Benefit? The amended benefit is available to all members of CUPW – Urban Postal Operations who were regular full- or part-time employees of Canada Post as of September 1, 2003, and who did not terminate their employment prior to December 31, 2003. How Do I Make My Choice? Beginning in late January through April 30, 2004, a personalized letter will be sent to employees in batches according to alphabetical order of last name. It will indicate the value of your severance pay entitlement as of December 31, 2003. Also included will be a form that you must complete and return within 30 days specifying your choice of either receiving the benefit on June 30, 2004 or upon retirement. Payments for those choosing to obtain their benefit before retirement will be added to the June 30, 2004 pay cheque, provided the necessary documentation has been received. What Else Do I Need to Know? Please read the attached Questions and Answers carefully for additional information concerning this important change and how it will be administered. The income tax implications associated with how this benefit is paid vary with each individual circumstance. You are therefore encouraged to consult a financial advisor to discuss your options. What if I Still Have Questions? For any additional questions or concerns, please contact a member of my team by: Mail: CUPW Severance Pay 2701 Riverside Drive, Suite B409 OTTAWA ON K1A OB1 e-Mail: Sevpay.ice@canadapost.ca Telephone: Employees can call 1-800-661-7011 toll-free to leave a message with their name, employee i.d. number, phone number and the best time to be reached. A severance pay specialist will return the call as quickly as possible. Employee Information Line: Canada Post employees can call the 24-hour Information Line at 1-800-394-4000, in Ottawa 274-1199 (TTY/TDD 1-800-267-2792) and follow the prompts under “Benefits, Option #2” to leave a message with their name, employee i.d. number, phone number and the best time to be reached. A severance pay specialist will return the call as quickly as possible. Employees will also have the option to request a copy of the Questions and Answers, which can be sent to them via fax, e-mail or lettermail. (Lynn Palmer Signature Block)
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